The Faber Report

  Monday, 15 Apr 2019 | 9:43 AM ET

Occidental bid for Anadarko reached mid-$70s per share before Chevron deal disrupted talks: Sources

Merger talks between Occidental Petroleum and Anadarko Petroleum were ongoing when Chevron announced on Friday it would acquire Anadarko for $33 billion, preventing Occidental from potentially upping its offer price, sources tell CNBC.

The deal announcement by Chevron cut short the talks between Occidental and Anadarko, the sources told CNBC's David Faber, who reported the rival bid by Houston-based Occidental on Friday. The Occidental bid had reached the mid-$70s per share and was being structured as a 40% cash deal.

Occidental was under the impression talks would extend into the weekend, with an opportunity to increase its bid, people familiar with the situation say. Mergers and acquisitions are often announced on Monday, and the Friday announcement caught some parties involved in the process by surprise.

Occidental continues to consider whether it should take the price to shareholders in an unsolicited offer, the sources say. The breakup fee for the Chevron-Anadarko deal is said to be 3% of the deal.

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  Monday, 15 Apr 2019 | 9:40 AM ET

Faber Report: Anadarko never terminated Occidental deal talks

CNBC's David Faber reports on the latest details surrounding the Chevron-Anadarko deal, including the reporting that Occidental had bid on Anadarko, however was turned down for Chevron. »Read more
  Friday, 12 Apr 2019 | 10:40 AM ET

Disney's Iger hints at more job cuts from Fox deal: 'There's work to do'

Posted ByThomas Franck

Disney's chief executive said that the company has only just started making global layoffs as it works to incorporate its newly acquired assets from 21st Century Fox.

Bob Iger, the chairman and CEO of the Walt Disney Company, added that the job cuts are necessary to generate beneficial synergies, an industry term referring to the impact a business tip-up can have on profits or revenues.

In this case, Disney's executives have forecast about $2 billion in cost saving synergies as the combined company cuts business segments or employees that were duplicated through the Fox acquisition.

"We're just beginning a consolidation process across the world. And we've been candid about that with people in the organization," Iger told CNBC's David Faber on Thursday. "There's work to do to get to the synergies that we talked about, which were cost synergies. We have consolidation ahead of us."

Asked explicitly whether there are more job cuts to come, Iger answered in the affirmative.

"We're very early into this process and I've never second guessed decisions that we've made. And I'm certainly not going to second guess this one, not at this point anyway," he added.

Iger told that his conversations with Fox's Rupert Murdoch that ultimately led to the $71 billion deal were based on on the launch of Disney+.

The chief executive's sit-down with CNBC came just after Iger and other Disney leaders unveiled Disney+, the company's forthcoming direct-to-consumer offering. The streaming service is set for launch on Nov. 12 and will cost $6.99 per month or $69.99 per year.

Iger also confirmed at the company's investor day on Thursday that he will step down in 2021.

"I'm expecting my contract to expire at the end of 2021," Iger said during Disney's investor day presentations. "And I was going to say 'and this time I mean it,' but I've said it before."

Iger has postponed his contract with Disney twice during his tenure and has made a successful Disney+ a priority in his last few years at the head of the company.

"The most important thing is that the company get through the transition seamlessly," Iger told CNBC. "I believe that two-and-a-half years from now, or roughly two years after we've launched this massive initiative, the company — it will be well on its way."

"That will be the right time for a transition at the CEO level. The Fox acquisition will have been assimilated. We will be off and running on the direct-to-consumer space," he added.

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  Friday, 12 Apr 2019 | 9:36 AM ET

Iger says Disney bought Fox because of value it adds to streaming service: 'The light bulb went off'

Posted ByThomas Franck

Disney wouldn't have spent $71 billion on 21st Century Fox assets including National Geographic, "The Simpsons" and its movie studio if it didn't have plans to launch its own streaming service, according to the company's top executive.

Disney Chairman and CEO Bob Iger told CNBC on Thursday that his conversations with Fox's Rupert Murdoch were predicated on the introduction of Disney+ and followed its 2017 purchase of BAMTech, a New York-based streaming media company.

"The opportunity to buy Fox first came up later that year. In fact, just a few months after the board approved us buying the majority share of BAMTech — which was done for one reason, to go into the direct-to-consumer business — Rupert and I sat down and talked about a transaction," Iger told CNBC's David Faber.

"We would not have done that transaction had we not decided to go in this direction," Iger continued, "because — if we hadn't, we would have been looking at that business and through a traditional lens: 'Oh, we're buying TV channels. We're buying more movie-making capability, et cetera.'"

"But by the time the acquisition opportunity came up, and we knew we were going in this space, we evaluated what we were buying through this new lens of: 'Wow, what could National Geographic mean to us?'"

Iger's comments came shortly after the company told stakeholders that its new streaming service, Disney+, will launch on Nov. 12 and be available for purchase for $69.99 per year.

The platform will host Disney's extensive vault of feature films ranging from the "Star Wars" franchise to action films from Marvel Studios. It will also include the myriad Fox assets acquired during the deal that closed in late March.

"What could it mean having access to [Fox's] library, not to monetize it through traditional means, but to do it through this?" Iger added. "Bam! I mean, the light bulb went off."

»Read more
  Friday, 12 Apr 2019 | 9:11 AM ET

Occidental bid more than $70 a share for Anadarko and is now considering options: Sources

Posted ByDavid Faber

There was another bid for Anadarko Petroleum, the oil and gas explorer that Chevron said it was buying for $65 a share in cash and stock.

Before Friday's announcement of the deal, Occidental Petroleum had bid more than $70 a share for Anadarko in cash and stock, people familiar with the situation told CNBC, but the company ultimately decided to go with Chevron.

In addition to being higher, the Occidental bid contained more cash than the Chevron offer and would have required a shareholder vote, the people said.

However, the people familiar said there were some structural issues with the Occidental bid with which Anadarko may not have been as comfortable.

Occidental is now considering its options, people familiar with the matter told CNBC, but it's unclear if the company will launch a hostile bid for Anadarko.

The Chevron-Anadarko breakup fee is said to be 3% of the deal price, which is nearly $1 billion. That transaction will expand the second biggest U.S. energy company's operations in shale oil and gas production, offshore drilling and liquefied natural gas exports. The deal also would be the 11th biggest in history for an energy and power company, according to Refinitiv.

– CNBC's Michael Sheetz contributed to this report.

»Read more
  Friday, 12 Apr 2019 | 9:04 AM ET

Disney chief Bob Iger: The media industry 'has never been this dynamic'

Posted ByThomas Franck

Disney Chief Executive Officer Bob Iger believes that the media industry is at a turning point as novel technologies and consumer preferences demand even more from those in the entertainment business.

In an interview with CNBC's David Faber, the longtime CEO said that while the company will always be tied to quality storytelling, the launch of its new direct-to-consumer service Disney+ reveals just how much the media landscape is evolving.

"It's changing so much, the marketplace has never been this dynamic, meaning speed of change is much faster," Iger said in the interview that aired Friday on CNBC. "And that's technology, that's consumer behavior driven by technology. It's economics, it's how things are marketed anywhere you look."

Iger's comments came shortly after he and other Disney top brass unveiled at the company's investor day its streaming service, Disney+.

The platform, which will be available starting Nov. 12, will offer customers an enormous amount of Disney media from Day One. Feature films from Pixar, Lucasfilms, Marvel Studios will accompany new, original content on the platform and will be available for download so that films and shows can be viewed offline.

Iger also told analysts on Thursday he plans to step down when his contract ends in 2021.

The hotly anticipated Disney+ likely marks a key moment in the industry's pivot toward a streaming-dominant platform as more and more customers flock to direct options like Netflix, Hulu and Amazon Prime Video.

Iger added that while Disney may not have been the first player in the streaming space, it is important that the company continue to modernize to not fall behind both in storytelling and in how that storytelling is delivered.

"I think one of the reasons why companies fail to innovate is, they continue to measure it against today," Iger said. "It becomes very, very difficult to innovate — again, because you just you're — you're so tied to the business model that got you where you are, which could be great."

"But it often causes companies to not think about: what is that business model going to look like tomorrow?" he added.

Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.

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  Thursday, 11 Apr 2019 | 10:00 PM ET

Disney CEO Iger gives three reasons why the company's streaming service will be a success

Posted ByThomas Franck

Disney Chairman and CEO Bob Iger explained to CNBC's David Faber that he believes customers will flock to the company's new streaming service, Disney+, thanks to a unique combination of factors.

"I'm pretty optimistic about the ability for this thing to work. Particularly when you make it accessible because of the content we're putting on, because of the user interface and because of the price," Iger said. "If, in five years' time, I prove to be wrong — or we prove to be wrong — we're still making great content that's going to be in great demand globally."

"And you can shift in a moment and license to third parties," he added. "But I don't think that's really an issue. You're building up library value regardless."

Disney announced Thursday that its streaming service will be available starting on Nov. 12.The new service will allow customers unlimited downloads so that content can be viewed offline. Iger also told analysts on Thursday that he would be stepping down in 2021 when his contract ends.

Disney+ also represents a big bet by the media giant that it can both terminate its profitable licensing relationship with Netflix and eventually compete with the entrenched rival.

It acquired assets from 21st Century Fox for $71 billion to shore up its content trove, including National Geographic and the Fox movie studio. The Fox assets joined a host of heavyweight entertainment assets like Marvel Studios and Lucasfilm, producer of the "Star Wars" empire.

All of the company's 2019 films will be available on Disney+ when their theatrical and home entertainment windows have end. The company added that it will continue to release major motion pictures to theaters prior to their appearance on the streaming service.

Disney+ is expected to mark a critical moment in the fierce streaming wars between the likes of Netflix, Hulu and Amazon Prime Video.

»Read more
  Thursday, 11 Apr 2019 | 9:05 PM ET

Bob Iger says Disney's brand gives new streaming service an edge over Netflix

Posted ByThomas Franck

Disney Chairman and CEO Bob Iger told CNBC's David Faber on Thursday that the company's new streaming platform has an edge over rival streaming service Netflix.

"While I think Netflix has done a good job of creating brand value, and name value, and a product that I think is considered of great value to a lot of people, they're still building their brand in many respects," Iger said. "Whereas in our case, we start with a customer relationship that, in many respects is visceral."

"We're pricing this to be accessible to the millions and millions – if not hundreds of millions – of Disney fans, and Marvel fans, and Pixar fans, and 'Star Wars' fans that are out there," he added. "The sheer number of people worldwide that know our brands, that interact with our brands on a daily basis, that spend money on our brands is huge. And no other company has that."

Disney announced Thursday at the company's investor day that Disney+ will be available starting on November 12 for $6.99 per month or $69.99 per year. The new service will allow customers unlimited downloads so that content can be viewed offline.

Iger also told analysts on Thursday that he would be stepping down in 2021 when his contract ends.

The importance of Disney+ is difficult to understate both for Disney as a leading media empire as well as for Iger himself, who's postponed his retirement to see the project through.

Iger, who's served as the company's chief executive since 2005, first announced in summer 2017 that Disney would introduce its own online streaming service. Though the decision will allow Disney to better take advantage of its extensive media hoard, it's also forced the company to make a huge bet that it can both terminate its profitable licensing relationship with Netflix and eventually compete with entrenched rivals.

»Read more
  Friday, 8 Mar 2019 | 10:36 AM ET

SoftBank's Vision Fund has already invested $70 billion, CEO Masayoshi Son says

Posted ByFred Imbert
SoftBank CEO Masayoshi Son speaks in front of a screen displaying the Yahoo Japan logo.
Tomohiro Ohsumi | Bloomberg via Getty Images
SoftBank CEO Masayoshi Son speaks in front of a screen displaying the Yahoo Japan logo.

SoftBank CEO Masayoshi Son said the $100 billion Vision Fund has already invested about $70 billion of its money and could make even more bets in the future.

"We've invested probably $70 billion or so," Son, who goes by the nickname "Masa" told CNBC's David Faber. "But we have banks who are wishing to support us for extending leverage because the value of our assets has grown."

SoftBank's Vision Fund was founded in Nov. 25, 2016 and has invested billions of dollars in companies like ride-hailing firm Uber Technologies, food-delivery company Doordash, shared office space firm WeWork and messaging firm Slack. "Many of them are having IPOs," Son noted, including an offering by Uber expected soon. "So the banks are willing to support us," he said.

Investments of more than $3 billion need consent from Vision Fund's backers, including limited partners such as the sovereign wealth funds of Saudi Arabia and Abu Dhabi, Son said. But the fund manages the investments as it sees fit.

So far, Son is happy with the investments thus far.

"Our return on the investment is very, very good," Son said. So some people may say, 'Well, Masa, you paid too much.' But still our company's value is growing very quickly after our investment," he said.

The fund's return since 2000 is 44 percent.

But the fund's massive spending has raised worries that SoftBank may need to launch another Vision fund. Son said he sees himself doing it again, but added it is too early to say whether he will.

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  Friday, 8 Mar 2019 | 9:08 AM ET

SoftBank CEO Masayoshi Son: A.I. will completely change the way humans live within 30 years

Posted ByFred Imbert

People should brace themselves for the proliferation of artificial intelligence as it will change the way we live within three decades, SoftBank CEO Masayoshi Son told CNBC.

"Within 30 years, definitely, things will be flying," Son told CNBC's David Faber in an interview that aired Friday. "Things will be running much faster without accident. We will be living much longer, much healthier. The diseases that we could not solve in the past will be cured."

Son has long championed the benefits of artificial intelligence, investing billions of dollars in companies he believes can capitalize on it. Some of these companies include Uber Technologies and WeWork. He said all the 70 or so investments of his Vision Fund have been focused on AI.

"We are investing $100 billion in just one thing, AI," he said.

Uber is an example of a company that will transform the way humans move around. "Today we are driving ourselves," he said. "That would no longer be the case. "AI would make the transportation to cause zero accidents."

However, some have cautioned against the proliferation of AI.

Physicist Stephen Hawking said before his death last year that the emergence of AI could be "worst event in the history of our civilization," noting it could lead to the creation of autonomous weapons. Tesla CEO Elon Musk said in 2017 that AI could bring aboutWorld War III.

Others argue that greater artificial intelligence could lead to job losses. But Son is not too worried.

"I'm [an] optimist, OK? There will be always be an issue, … but mankind is smart enough. We always try to adapt to the new situation."

»Read more